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26th November 2019

Transformation through broadband

At Smart Africa, our vision is to bridge the digital divide through various channels using existing and emerging technologies.

Broadband access is a key enabler to achieve this vision, however, as the market matures, the rate of penetration slows down. This is because the service providers - which, in the case of Africa, are predominantly mobile network operators - continue to use the traditional business models, with a limited time for the Returns-On-Investments.

Perhaps it's time to move away from these traditional business models. Service providers should embrace the intangible or non-direct benefits of broadband, such as job creation, improved quality of life, access to information, increased literacy levels, etc.

The benefits of broadband

How about quantifying the efficiency and increased market reach of being online with small businesses for people who hitherto had no access?

How about quantifying the impact of lives saved through telemedicine for people who hitherto would not have had access and had to die?

How about quantifying the impact and increased productivity for the child who had little or no access to education? Thanks to the service provider’s connectivity, the child now has access via e-learning.

These are the kind of impacts that may not be achieved within the traditional Return-On-Investment period. But in the longer term, a few years down the line the impact will be reflected in the Gross Domestic Product of the country of implementation.

The transformation of the lives which follows will have more impact on the overall socio-economic development of the country than the lump sum payment.

Adjusting the infrastructure

Policymakers need to reconsider the existing taxation modalities of foreign direct investments, internet service providers, passive infrastructure providers, and submarine cable providers. To encourage a new financial model for the internet industry, the policymakers should be aiming to make these investments more attractive as a form of incentivisation.

Between 2014 and 2016, global voice revenue dropped by almost a quarter. This was partially offset by a $ 70.2 billion increase in mobile data revenue, but that was still 61% lower than the loss recorded in voice revenue ($ 114.6 billion), according to the International Telecommunication Union.

Meanwhile, service providers continue to invest capital expenditure at an average rate of 16% of total revenues, in order to stay relevant and improve the quality of experience for subscribers.

Embracing new technologies

To reduce the operational cost of broadband service providers and become more efficient is to embrace the emerging technologies such as artificial intelligence, big data analytics and blockchain during the deployment and operations of 5G to enable the Internet of Things (IoT). The efficiency and security these technologies bring will help service providers gain a competitive advantage and ensure that they are future-proof.

Smart Africa will continue to work with the regulators, various ministries of ICT and private investors as an enabler to bring out opportunities aimed at achieving a collaborative effort.

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